Month: January 2012

Newton, MA. Realtor

5 Real Estate Trends to Look For in 2012

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

Yes, buyers are returning in droves, but only for property that has a real perception of value.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

There were more foreclosures in Newton during 2011, however there are not enough of them to have a significant impact here in Newton

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

They will eat up some of the buyer demand in the market.

They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

Again, Newton has been spared the foreclosure debacle for the most part. Appraisals continue to be stressful, greater responsibility is required from the Agents to come armed with comps. Many appraisers have never stepped foot in Newton before.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

Yes, there has been a noticeable increase in short sales. I believe this could impact the number of sales because these buyers for the most part are not moving up to larger homes. On the other hand, this is a supply and demand business, so less inventory usually means higher prices.

5. Great Agents Will Be VERY Successful

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

Yes, this is already happening. The old way of doing business doesn’t cut it anymore. You need an agent who is:

1.tech savvy

2. hard-working

3. knowledgeable

4.well-respected by the rest of the real estate community

5. strong negotiation skills with the ability to communicate effectively….sometimes that means speaking to your clients and not just e-mailing or texting.

Yesterday my colleague Sally Bortz and I conducted an open house in the heart of Newton Centre. The house is a solid brick colonial with 3 bedrooms on the second floor plus one on the 3rd floor. The kitchen is small and probably last renovated in the 60’s. The baths all need updating along with the removal of some old knob and tube wiring. So what was so special about this house that we had over 150 groups of people many who had to wait in line to get in the house? The price—it wasn’t priced as a give away it was priced correctly. The house is in a neighborhood that is highly desirable and the price point created a perception of value. The word is buyers are looking to steal houses when in reality they are truly looking for value.

As of 9AM this morning there were 11 offers that will be reviewed with the seller in an hour or so. Her decision will be based upon price and terms, not just price. Price is an important part of every transaction, would you choose a buyer with 10% down or 40% down? Are you going to have faith in the buyer looking at every fault the house has or the buyer who sees the fault and says I can update them?